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Occupational Accident vs Workers Comp
In a nutshell, Workers Compensation provides wage replacement and medical benefits to hired employees whereas Occupational Accident Insurance provides similar benefits, but to independent contractors/owner operators. Which type of coverage is right for you, as a motor carrier, depends on your workforce.
Occupational Accident (Occ/Acc) for Truckers
Since independent contractors aren’t technical employees, companies aren’t legally obligated to pay for their medical, disability, death, or dismemberment benefits in the same way as they would with a hired employee. But, understandably, when a contract worker is hurt on the job, he doesn’t care about a company’s legal obligations—he just wants help paying his hospital bills. Independent contractors hurt on the job will sometimes sue a trucking company, claiming that they were a hired employee all along and that they legally deserve compensation. That’s where Occupational Accident Insurance comes into play.
Occupational Accident Insurance, which is particularly popular in the world of trucking, doesn’t automatically cover the same statutory limits that workers’ compensation insurance does. Businesses get to choose their limits, deductibles, and the amount of disability coverage they provide, making Occupational Accident a cheaper alternative to Workers’ Compensation. Motor carriers often purchase a small workers’ compensation policy to cover hired employees and supplement it with an occupational accident policy to cover their contract drivers.
Workers Compensation for Truckers
Businesses are required by law to pay for a hired employee’s lost wages and medical bills if that employee is hurt on the job. Most business owners choose to purchase Workers’ Compensation Insurance to cover themselves against situations like these. The payouts from workers’ compensation meet and exceed a jurisdiction’s minimum requirements, and in exchange, an employee relinquishes his right to sue the company. Workers’ comp is designed to protect workers from company negligence as much as it is to protect companies from worker lawsuits.
Know the laws in your State
Some States allow you to cover your workers comp obligations through an occ/acc policy. Some don’t. Almost every State has their own minutia in the wording of your requirements. Some States, like Texas, have been historically more flexible with allowing occ/acc instead of workers compensation. In California, where workers compensation is largely unaffordable, most motor carriers have to rely on the state fund for coverage. Whether you are from Florida, Illinois or New York, or any where in between, make sure your agent is an expert in your states’ laws and requirements.
Supplement Occ/Acc polices with Contingent Liabilty
When purchasing occupational accident insurance, make sure that you are completely covered. A smart occupational accident policy includes a contingent liability provision that protects your drivers no matter where they are in the country and pays for lawsuits a contracted driver might file against you. Make sure that your limits are high enough to meet all the minimum requirements in your state. If you don’t have contingent liability insurance and your driver sues you and wins, you will be responsible for any amount owed to an injured employee that your occupational accident insurance doesn’t cover.
To find out which policy is best for your business, the best thing you can do is speak to more than one agent. That’s why we get you in touch with three. This way, you easily compare multiple polices and pick the best one at the best price.